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Course 171010- Techniques of Financial Analysis
  Final Exam
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171010v - Techniques of Financial Analysis

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20 CPE Credit Hours

Final Exam
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Read 'Chapter 1: Break-Even And Contribution Margin Analysis' & answer the following question(s):
1. Fixed costs are $60,000 and variable costs are 40% of sales. Break-even sales equals
2. You sell a product at $20 per unit with variable costs of $5 per unit and total fixed costs of $30,000. The after-tax profit is $120,000 and the tax rate is 40%. How many units must be sold to earn the after-tax profit?
3. At the breakeven point, the contribution margin equals total
4. Cost-volume profit relationships that are curvilinear may be analyzed linearly by considering only
5. When an organization is operating above the breakeven point, the degree of amount that sales may decline before it suffers losses is the
6. The breakeven point in units decreases when unit variable costs
7. Cost-volume-profit analysis assumes over the relevant range that
8. Cost-volume-profit analysis assumes that over the relevant range
9. The relevance of a particular cost to a decision is determined by the
10. To find the cash break-even point, the charges to be subtracted from total fixed costs are:
11. In a multiproduct or service business, to compute the break-even for an individual product or service, it is not necessary to compute:
12. The present value of an annuity of $1 table is used to determine a future value. T F
13. Which table has the highest factor?
14. You take out a mortgage today and will make equal monthly payments over 10 years at a specified interest rate. Which table would be used to solve this problem?
15. The present value of a $1 table is used to determine a future value. T F
16. The rate of return earned on a proposal such that the present value of cash inflows equals the present value of cash outflows is derived from the profitability index. T F
17. A graphic description of the sequence of possible outcomes is referred to as:
18. An initial investment of $20,000 generates annual cash inflows of $8,000. The payback period is:
19. The rate of return earned on a proposal such that the present value of cash inflows equals the present value of cash outflows is derived from the internal rate of return method. T F
20. The capital budget is a (n)
21. Capital budgeting techniques are least likely to be used in evaluating the
22. The capital budgeting model that is ordinarily considered the best model for long-range decision making is the
23. The internal rate of return (IRR) is the
24. The ratio of cash plus marketable securities plus accounts receivable divided by current liabilities is called:
25. The earnings per share is computed for:
26. An increase in the current ratio while the quick ratio remains constant means a buildup in:
27. Using financial leverage is a good financial strategy from the viewpoint of stockholders of companies having:
28. The price/earnings ratio:
29. What type of ratio is earnings per share?
30. A measure of long-term debt-paying ability is a company’s
31. Which of the following measures the time needed to turn cash into inventory, inventory into receivables, and receivables back into cash?
32. An increasing trend in audit fees may indicate a problem with:
33. Quality of earnings is improved when a company has a high degree of estimated expenses. T F
34. Determine the material quantity variance using actual production of 100 units of output, 3 pieces allowed per unit, actual price of $2 per piece, and standard price of $3 per piece. Assume the company used 240 pieces of material.
35. Return on investment is one method under which center concept?
36. Which one of the following budgeting methodologies would be most appropriate for a firm facing a significant level of uncertainty in unit sales volumes for next year?
37. Which of the following is a purpose of standard costing?
38. An efficiency variance equals
39. Which of the following factors should not be considered when deciding whether to investigate a variance?
40. Which department is customarily held responsible for an unfavorable materials usage variance?
41. The least complex segment or area of responsibility for which costs are allocated is a(n)
42. Responsibility accounting defines an operating center that is responsible for revenue and costs as a(n)
43. Which one of the following organizational segments is held responsible for the revenues earned and costs incurred in that center?
44. The sales price variance equals:
45. The sales volume variance equals: (actual quantity vs. budgeted quantity) x actual selling price. T F
46. The sales mix variance equals: (actual quantity vs. budgeted quantity) x actual selling price. T F
47. The sales quantity variance equals
48. The cost volume variance equals
49. A company's net income is $1,500,000, total assets are $5,000,000, sales are $4,000,000, and the minimum rate of return is 10%. Residual income equals:
50. Residual income is a better measure for performance evaluation of an investment center manager than return on investment because
51. ________________ is not an action management can take to enhance rate of return on investment (ROI):
52. Improving Economic Value Added (EVA) can be achieved by
53. The Du Pont formula combines the income statement and balance sheet into a static measure of performance. T F
54. Residual income (RI) differs from ROI because
55. If usage per month is 100 units, economic order quantity is 20, cost per order is $35, and carrying cost per unit is $12, the total order cost is:
56. The added profitability generated from giving credit to marginal customers is the:
57. "Mail float" is how long it takes for a check to go from payor to receiver. T F
58. A stock that does not have a track record of high earnings and dividends is referred to as:
59. Stock selection based on studying trends in charts of volume and price of a security is referred to as:
60. A put option is an option to buy a security at a stipulated price during a stated time period. T F
61. The return on investment typically comes from two sources: __________ and capital gains (losses).
62. As a measure of relative risk, we use the
63. Assume that the risk free rate (rf) is 8% and the expected return for the market (rm) is 12%. If beta is 2.0, the required rate of return on a security is
64. A call option is an option to buy a security at a stipulated price during a stated time period. T F
65. Standard deviation divided by average net income is called:
66. Factors that an investor considers in evaluating a firms stock include all except:
67. Primary assumptions underlying technical analysis do not include
68. Which of the following is not a tool for technical analysis?
69. When you buy less than 100 shares of a company you have purchased
70. In investment terminology, selling stock that you have borrowed is known as a
71. One of the best sources of financial market and individual security price data that appears on a weekly basis is
72. The most widely followed stock average is the
73. _______ is a portfolio characteristic which leads to reduced risk with good return.
74. Portfolio management involves making decisions in order to
75. Buying _______ would not be an investment.
76. ________________ is not a key indicator of market and stock performance.
77. The opportunity cost associated with failing to pay a supplier on terms of 2/10, net/30 is:
78. Unsecured short-term notes issued by the highest quality companies is called:
79. A continuing agreement for loans up to a specified amount is referred to as line of credit. T F
80. A merger of two companies in unrelated industries is what type of combination?
81. A holding company's only purpose is to buy the securities of other companies. T F
82. Exponential smoothing uses averages that are updated as new information is received. T F
83. Which of the following methods involves an extensive use of monthly historical data for estimating budget activities?
84. Classical decomposition of time series do not deal with
85. The use of multiple independent variables usually increases the proportion of the variation in the dependent variable explained by the cost prediction equation. T F
86. Mount Company incurred a total cost of $8,600 to produce 40 units of pulp. Each unit of pulp required 5 direct labor hours to complete. What is the total fixed costs if the variable cost was $15 per direct labor-hour?
87. The letter y in the standard regression equation of y = a + bx is best described as the
88. Sales forecasts are usually more reliable, especially if fluctuations in certain economic indicators precede fluctuations in the company sales, if certain relationships exist. One measurement tool used to examine the relationship between sales and economic indicators is known as
89. In regression analysis, which of the following correlation coefficients represents the strongest relationship between the independent and dependent variables?
90. The coefficient of determination between direct materials cost and units produced is nearest
91. Zero-base budgeting requires managers to:
92. Direct material purchases equal
93. The major steps in preparing the budget do not involve:
94. The percent-of-sales method of forecasting is based on which of the following assumptions?
95. The master budget process usually begins with the\
96. Which of the following is normally included in the financial budget of a firm?
97. All of the following are considered operating budgets except the
98. _________________ offers a more pragmatic method of estimating collection and bad debt percentages by relating credit sales and collection data.
99. ____________________ is not a spreadsheet software package.
100. Which of the following is not among the advantages of lagged regression over the Markov model when it comes to projecting cash flows?
Read 'Chapter 2: Understanding And Applying The Time Value Of Money Concept' & answer the following question(s):
Read 'Chapter 3: How To Assess Capital Expenditure Proposals For Strategic Decision Making' & answer the following question(s):
Read 'Chapter 4: Analyzing Financial Statements For Financial Fitness' & answer the following question(s):
Read 'Chapter 5: Analyzing Quality Of Earnings' & answer the following question(s):
Read 'Chapter 6: Analysis Of Variance Analysis For Cost Control' & answer the following question(s):
Read 'Chapter 7: Analysis Of Segmental Performance And Profit Variance' & answer the following question(s):
Read 'Chapter 8: Evaluating Divisional Performance' & answer the following question(s):
Read 'Chapter 9: Analyzing Working Capital' & answer the following question(s):
Read 'Chapter 10: Corporate Investments' & answer the following question(s):
Read 'Chapter 11: Obtaining Funds: Short-Term And Long-Term Financing' & answer the following question(s):
Read 'Chapter 12: Analyzing Mergers And Acquisitions' & answer the following question(s):
Read 'Chapter 13: Forecasting And Financial Planning' & answer the following question(s):
Read 'Chapter 14: Forecasting Methododology' & answer the following question(s):
Read 'Chapter 15: Forecasting With Regression And Markov Methods' & answer the following question(s):
Read 'Chapter 16: Financial Forecasting And Budgeting Tools' & answer the following question(s):
Read 'Chapter 17: Forecasting Cash Flows' & answer the following question(s):
Read 'Chapter 18: How To Use Corporate Planning Models' & answer the following question(s):
Read 'Chapter 19: Financial Modeling For "What-If" Analysis' & answer the following question(s):
Read 'Chapter 20: Using Optimization Techniques To Build Optimal Budgets' & answer the following question(s):
Read 'Chapter 21: Using Spreadsheet And Financial Modeling Packages' & answer the following question(s):
Read 'Chapter 22: Using Management Games For Executive Training' & answer the following question(s):
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